What is a Washington Commission Merchant Bond?
Know the who, what, and how of this bond!
Any Commission Merchant in the State of Washington is required by the Washington State Department of Agriculture, in pursuant of the Washington Commission Merchants Act, to become licensed to perform his or her duties.
One of the essential requirements of the said license is a surety bond.
A Commission Merchant is a person who sells or resells on commission a consignor’s agricultural products.
What is the bond amount?
Hay, Straw, or Seed Merchant
Bond amount computation: The merchant of hay, straw, or seed’s annual dollar volume net proceeds or net payment that is due to the consignor is divided by 12. The sum is then increased to the next multiple of $5,000.
The bond amount for new merchants of hay, straw, or seed may be increased during its first year. The increase will be based on the average business volume of any three months.
Bond amount computation: should be based on the Packers and Stockyards Act of 1921 (7 U.S.C. 181) formula.
A $5,000 increase is added to the bond per livestock merchant’s agent who is seeking a license of his or her own.
A livestock merchant who is also acting as a buyer for other licensed and bonded persons by the Chapter 20.01 of The Revised Code of Washington or the Packers and Stockyards Act may subtract the amount of his or her annual gross volume of purchases reported to the director to determine the bond amount needed.
Merchants of Agricultural Products Other than Livestock, Hay, Straw, or Seeds
Bond amount computation: The merchant of hay, straw, or seed’s annual dollar volume net proceeds or net payment that is due to the consignor is divided by 52. The sum is then increased to the next multiple of $2,000.
Bond amounts that are more than $26,000 should be increased to the next multiple of $5,000.
What are the Washington Commission Merchant Bond conditions?
- The bond should be issued by a surety bond company that is authorized to conduct such business in Washington
- The bond should be made payable to the State of Washington
- The license applicant should comply with all the provisions of Chapter 20.01 of The Revised Code of Washington
- The bond will remain valid until canceled. In the case of cancellation, a 30-day notice is required.
How can I acquire this bond?
You must first submit a bond application.
Once we have received your application, one of our expert surety bond agents will guide you through the whole process – from application until submission.
An underwriter will then evaluate your financial strength, job performance history, and your credit score.
Once the prequalification process has been fulfilled, we will execute the bond and send it to you!
Need a bond immediately? Apply today!